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HQ 960458




October 21, 1997

CLA-2 RR:CR:GC 960458K

CATEGORY: CLASSIFICATION

TARIFF NO.: 1604.14.20; 1604.14.30

Mr. Stanley F. Den Adel
Corporate Secretary
Marshall Islands Specialty Seafood Company, Inc. 17355 Lassen St.
Northridge, California 91325

RE: "Tuna Jerky"; Marshall Islands; Tariff Rate Quotas

Dear Sir:

Your undated request for a classification ruling received on April 21, 1997, was referred to our office for a direct response by the Director, National Commodity Specialist Division, New York Seaport. Samples of the product were included. We have also received your additional submission dated September 30, 1997. Our ruling follows.

FACTS:

Tuna fish caught in the waters of the Marshall Islands and processed in the Marshall Islands is intended for direct shipment to the United States. The product is known as "Jerky Tuna". Fresh tuna fish is filleted, cut into thin strips, seasoned with marinade, dehydrated in an electric oven, and packaged as a food snack in one ounce and larger plastic packages. The condiments used to make the marinade are U.S. products. Although the dehydration eliminates spoilage as a problem, the plastic packages are further vacuum packed to extend the shelf life.

ISSUE:

The classification of "tuna jerky" and whether it is subject to a tariff rate quota.

LAW AND ANALYSIS:

Subheading 1604.14.20, Harmonized Tariff Schedule of the United States (HTSUS), provides for prepared or preserved fish, whole or in pieces, but not minced; in airtight containers, not in oil, in containers weighing with their contents not over 7 kg each, and not the product of any insular possession of the United States, for an aggregate quantity entered in any calendar year not to exceed 20 percent of the United States pack of canned tuna during the immediately preceding year, as reported by the National Marine Fisheries Service, with a general rate of duty at 6 percent ad valorem, if imported in quantities that fall within the limits as described, and, if the limits have been reached, the tuna fish is classified in subheading 1604.14.30, at the over the quota general rate of 12. 5 percent ad valorem.

The merchandise as described is prepared or preserved tuna fish, in airtight containers, not in oil, and in containers not over 7 kg each. Accordingly, the merchandise is classified in subheadings 1604.14.20, or 1604.14.30, HTSUS, depending on whether the quantitative limitations have or have not been reached.

However, General Note 10(a) and (b), HTSUS, concerning Products of the Freely Associated States, which includes the Marshall Islands, provides for free entry of merchandise under certain circumstances with certain exceptions. General Note 10(c) states that

Tunas and skipjack, prepared or preserved, not in oil, in airtight containers weighing with their contents not over 7 kilograms each, in an aggregate quantity entered in any calendar year from the freely associated states not to exceed 10 percent of United States consumption of canned tuna during the immediately preceding calendar year, as reported by the National Marine Fisheries Service, may enter the customs territory free of duty; such imports shall be counted against, but not be limited by, the aggregate quantity of tuna, if any, that is dutiable under subheading 1604.14.20 for that calendar year.

General Note 10(d)(I), states that the duty-free treatment provided under subdivision (b) of this note shall not apply to
tunas and skipjack, prepared or preserved, not in oil, in airtight containers weighing with their contents not over 7 kilograms each, in excess of the quantity afforded duty-free entry under subdivision (c) of this note.

Additional U.S. Note 3, Chapter 16, HTSUS, also states that

For purposes of subheadings 1604.14.20 and 1604.14.30, tunas and skipjack from the freely associated states may be entered free of duty under the appropriate subheading in an aggregate quantity provided by, and under the terms set forth in, general note 10(c) to the tariff schedule. Goods from the freely associated states entered, or withdrawn from warehouse for consumption, in excess of such specified aggregate quantity shall be dutied under the appropriate subheading at the rate set forth in the "General" subcolumn of column 1.

We conclude that the product known as "Tuna Jerky" is classified in subheadings 1604.14.20 and 1604.14.30, HTSUS, depending as to whether the quantitative limitations have or have not been reached and are subject to the exceptions for free duty rates in accordance with General Note 10(c) and (d), and also subject to Additional U.S. Note 3, Chapter 16, HTSUS.

HOLDING:

The product known as "Tuna Jerky" from the Marshall Islands, as described above, is classified in subheading 1604.14.20, HTSUS (1997), with a free rate of duty if within the 10 percent limitation of General Note 10(c) and (d), HTSUS.

If the quantitative limitation of General Note 10(c) and (d) has been reached, but it is still within the quantitative limitation of 20 percent of subheading 1604.14.20, HTSUS, the product is dutiable at 6 percent ad valorem.

If the quantitative limitation of 10 percent under General Note 10(c) and (d), HTSUS, and the quantitative limitation of 20 percent under subheading 1604.14.20, HTSUS, have both been reached, the product is classified in subheading 1604.14.30, HTSUS, with a general rate of duty at 12.5 percent ad valorem.

Sincerely,

John Durant, Director
Commercial Rulings Division


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